Tennessee lawmakers are at odds after studying rejection of US education money over its requirements

Tennessee lawmakers have hit an impasse after studying whether the state should forgo more than $1 billion in federal K-12 education money annually, due in part to Republican backlash against rules to protect LGBTQ+ people, as senators caution that the rejection would be unprecedented and raise more questions than answers.

Those findings are spelled out in a letter this week from the Senate lawmakers on a joint House-Senate panel that studied the prospects of rejecting the money and replacing it with state cash. The senators wrote that they haven’t been able to agree with their House counterparts on recommendations about the federal education funding, much of which is targeted to serve low-income students, English learners and students with disabilities. A House report has not been released.

Republican House Speaker Cameron Sexton raised the idea of rejecting the federal education money early last year, saying the state could afford to backfill the money, estimated at as much as $1.8 billion, in an effort to avoid certain federal requirements. Some of those include LGBTQ+ protections, which Tennessee’s Republican supermajority Legislature has peeled back at the state level over the years.

Sexton and GOP Senate Speaker Randy McNally set up the study committee last September, leading to several meetings that included testimony from various experts, but not from the federal government.

The discussion comes as other states have flirted with rejecting federal education money, though none have gone through with it yet. The U.S. Department of Education has criticized the idea as “political posturing.”

Senators on the study panel noted that even if the state were to reject some or all of the federal education money, many federal requirements could still apply, which would likely land the state in court. And while the state probably could afford to fund the rejected amount, it would come at the expense of other potential investments.

They also wrote that if Tennessee rejects the money, much of it is based on formulas and would not result in savings for federal taxpayers unless Congress reduced that amount of funding. The money would probably just go to other states, senators wrote.

In Tennessee, federal education funds made up about 20% of the state’s $8.3 billion education budget for 2022-2023. The choice is also complicated by a slowdown in state revenues after high returns in recent years.

The senators detailed several other options, such as seeking a waiver to lift certain requirements, working with congressional members to change laws, requiring approval of lawmakers before a state agency can apply for a federal grant, and looping in lawmakers when the federal agency communicates with the state.

“There are more questions than definitive answers about what rejecting federal K-12 dollars could mean for Tennessee’s obligations because no state has ever done so,” according to the Senate report, signed by four Republicans and one Democrat on the joint committee.

Sexton’s office said the House will file its own report. It’s unclear what kind of proposals might surface out of the study during the legislative session that began this week.

In an interview this week before the Senate released its report, Sexton said that “at some point in the future,” lawmakers may move to reject federal education funding and replace it with state money. He said he expects lawmakers this session to parse through the different state and federal rules and testing requirements and their purposes, and ask that lawmakers get to regularly see the letters sent from federal education to the state.

Sexton mentioned concerns about the federal rules surrounding school lunch programs. He also expressed concerns about President Joe Biden’s administration proposing protections for transgender athletes.

At least 20 states — including Tennessee — have approved a version of a blanket ban on transgender athletes playing on K-12 and collegiate sports teams statewide, but the Biden administration proposal to forbid such outright bans is set to be finalized in March after two delays and much pushback. As proposed, the rule, announced in April, would establish that blanket bans would violate Title IX, the landmark gender-equity legislation enacted in 1972.

“What Biden is trying to do is inject that men can play women’s sports in Title IX,” Sexton said. “We just passed a law that says we don’t allow that in Tennessee. But if he puts it in Title IX, because he’ll never get it passed in Congress, it trumps state law and goes against what we believe should be the case in Tennessee.”

Tennessee is currently among 10 states that have long refused to expand Medicaid to thousands of low-income residents, many of whom can’t afford health coverage. And several years ago, many Republican-led states declined to keep accepting federal money for extra unemployment insurance payouts later in the COVID-19 pandemic.

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Kimberlee Kruesi in Nashville contributed to this report.